Indifferent between accepting the project and rejecting

Assignment Help Financial Management
Reference no: EM13913171

A project that provides annual cash flows of $16,600 for eight years costs $72,000 today.

What is the NPV for the project if the required return is 7 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

What is the NPV for the project if the required return is 19 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

At what discount rate would you be indifferent between accepting the project and rejecting it? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Reference no: EM13913171

Questions Cloud

An investment has an installed cost : An investment has an installed cost of $526,800. The cash flows over the four-year life of the investment are projected to be $222,850, $239,450, $206,110, and $154,820. If the discount rate is infinite, what is the NPV? At what discount rate is the ..
Eps presentation : Prepare the 2013 EPS presentation for the Esposito Import Company
International investment projects : Siva, Inc., imposes a payback cutoff of three years for its international investment projects. What is the payback period for both projects? Which project should the company accept?
Colorado business tools manufactures calculators : Colorado Business Tools, manufactures calculators.
Indifferent between accepting the project and rejecting : A project that provides annual cash flows of $16,600 for eight years costs $72,000 today. What is the NPV for the project if the required return is 7 percent? What is the NPV for the project if the required return is 19 percent? At what discount rate..
Prepare the balance sheet presentation at the end of 2009 : The company's accounting policies indicate that a provision for bad debts should be recorded at the end of each year based on 5% of the net credit sales of the year. Prepare the necessary journal entry showing the details of your computation.
Firm evaluates all of its projects by applying the irr rule : A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows:
Woodland industries manufactures and sells custom : Woodland Industries manufactures and sells custom made windows.
Project under consideration has the cash flows : A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: What is the NPV for the project if the required return is 10 percent?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the value of american call

Suppose that the exchange rate is 1 dollar for 120 Yen. The dollar interest rate is 5%(continuously compounded) and the yen rate is 1%(continuously compounded). Consider an at the money American dollar call that is yen-denominated. The option has 1 y..

  State transactions that involve a series of equal cash flows

Determining present value, relate to compounding, as used in determining future value? How are you able to apply discounting and compounding concepts to lump sum transactions versus transactions that involve a series of equal cash flows?

  Payments into your retirement account

You are graduating from college at the end of this semester and you have decided to invest $4,900 at the end of each year into a Roth IRA for the next 48 years. How much will you have if you wait 10 years before beginning to save and only make 38 pay..

  What are the semi-annual yields to maturity of the two bonds

Suppose you have the choice of investing in (A) a zero-coupon bond, which costs $500 today, pays no coupon during its life, compounds semi-annually, and then pays $1,000 after 10 years, or (B) a bond which costs $1,100 today, pays $45 in interest sem..

  What will be his after-tax yield to maturity

An investor purchases a 30-year U.S. government bond for $840. The bonds coupon rate is 10 percent and, it still had twelve years remaining until maturity. If the investor holds the bond until it matures and collects the $1000 par value from the Trea..

  Needs to plow back its earnings to fuel growth

What is the current share price? Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next seven years, because the firm needs to plow back its earnings to fuel growth.

  Portfolio equally invested in a risk-free asset

You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.05 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

  With projected annual sales growth

With a projected annual sales growth of 15% projected annual earnings retention of 12%, and a cash cycle of 30 days, is there a need for external financing?

  Explain outcome requires the lowest monthly contribution

As their financial planner, provide some assistance with these calculations. The two primary options are listed below. Considering all previous information, which outcome requires the lowest monthly (end-of-month) contribution if they also require..

  Used to estimate the cost of equity capital

If the CAPM is used to estimate the cost of equity capital, the expected excess market return is equal to

  Net community benefit expense

A hospital incurs $10 million of cost to treat Medicaid patients and receives $7 million in payment. Actual charges for these Medicaid patients were $20 million. The net community benefit expense that wold be reported in Schedule H of IRS form 990 wo..

  What are the positive and negative treads for truvia

Have you ever heard of Truvia? What are the competitors to Truvia? Is Stevia just a fad or a long term product? What are the positive and negative treads for Truvia?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd